Extension of the Total Energy Program

The "Total Energy Program" was created by means of Resolution No 459/2007 of the Ministry of Federal Planning, Public Investment and Services ("MPFIPyS"), with the purpose of encouraging the replacement of natural gas and/or electricity consumption, by the use of alternative fuels (fuel oil, diesel and others) for the different productive activities and/or power auto generation.

This Program is applicable to companies that use natural gas and/or electric power from the grid, as a necessary input for their activities and that are interested in participating in the replacement plan.

By means of Resolution MPFIPyS No 121/2008, the initial term of the "Total Energy Program" was extended until December 31, 2008, and the Program’s initial objectives were expanded, as well as the powers granted to the Coordination and Management Control Department (the Program’s Executing Unit) in order to fulfill these objectives.

Thus, the new objectives of the Total Energy Program are:

(i)            to ensure the supply of the energetic resources, either liquid or gaseous fuels, demanded by the productive sector as well as by the population during 2008, throughout the territory of the Republic of Argentina;

(ii)           to encourage the replacement of natural gas and/or electricity consumption, by the use of alternative fuels for different productive activities and/or electrical auto generation.

In order to comply with these objectives, the Coordination and Management Control Department, approved the "Total Energy Program’s General Rules", by means of Resolution No 30/2008 and provided that the Program’s Technical Operational Unit would be headed by Energía Argentina Sociedad Anónima (ENARSA), and the Monitoring and Control Unit would be in charge of the University of Buenos Aires. The Total Energy Program will be implemented through two operational plans:

1.    The General Plan for Gaseous Fuel Supply, that comprises:

(i)            a Liquefied Natural Gas (LNG) Supply Plan, whose objective is the construction, maintenance, management and administration of a system for the re-gasification of LNG (by a re-gasification ship) in order to supply this fluid to the Argentine market; and

(ii)           a Propane-Air Supply Plan, aimed at managing and administrating a system to acquire and deliver Propane-Air to be injected into the Province of Buenos Aires’ natural gas medium pressure distribution network, according to the technical possibilities of the provision of this fuel.

2.    The General Plan for Liquid Fuel Supply, that comprises:

(i)           a Demand Supply Plan aimed at ensuring the supply of liquid fuels derived from oil (liquefied petroleum gas, diesel, fuel oil, naphtha and oceanic improvers) to meet general demand, according to the economical growth and industrial development, and

(ii)           a Replacement of Gas and/or Electricity Consumption Plan by alternative fuels, with the purpose of: encouraging the replacement of natural gas and/or electricity consumption by using alternative fuels for different productive activities and/or electrical auto generation; making efficient the use of gas; contributing to the saving of power and natural gas through the use of alternative fuels; allocating efficiently the compensations due to the monetary differences arising from the use of alternative fuels, under the established procedures; and avoiding possible shortfall situations in the fuel supply that may condition the increases in demand associated to the economic growth.

The methodology for the implementation of each of these Plans shall be technically defined by ENARSA, bearing in mind the general guidelines established in the "Total Energy Program’s General Rules."

Finally, it was established that the expenditures required for the implementation of the actions developed under the Total Energy Program will be borne by the budget corresponding to the Administrative Financial Service 354 - MPFIPyS.